“Within state budgets, police and education are often the alternative to Medicaid costs. Are we so sure that Medicaid produces the maximum benefit for the money? Low-quality moralizing about the poor is not an answer to this question.”

That was from Tyler Cowen. Of course, projects like Medicaid are less about producing maximum benefits and more about signaling to voters that we care about the poor.  This makes it very difficult to effect the status quo.

That said, Medicaid should be one of the last parts of the health care budget to cut.  More of our health care aid should be like Medicaid, which is relatively cheap and also targeted at those who really need the assistance.  The correct Medicaid decisions depend on other budget choices, but ideally Medicaid is low on the list of recommended cuts, even if it may require some cuts.

It found that about half the customers noticed the calorie counts, which were prominently posted on menu boards. About 28 percent of those who noticed them said the information had influenced their ordering, and 9 out of 10 of those said they had made healthier choices as a result.

But when the researchers checked receipts afterward, they found that people had, in fact, ordered slightly more calories than the typical customer had before the labeling law went into effect, in July 2008.

These are fascinating results. People are generally conscious of the change, think they are responding in a positive direction, but actually doing the opposite. I’d be interested to see how people are making more unhealthier choices.

I’d be willing to bet that they are switching to foods that they perceive as being healthier, but actually contain more calories. This could be a result from an information asymmetry. The calorie counts are usually the ‘bare minimum’ of what fast food joints offer, without the fixings, sides and drinks. Perhaps people are switching to lower calorie foods, but getting more of the high caloric ‘frills.’

If we don’t assume rationality, another explanation is that people are unobservant and ignorant about what they’re putting in their mouths.

This also calls into doubt the ability for regulation to achieve the desired affects and highlights the important of price signals, especially because we’re in a recession. People are looking for the cheapest food these days and so will respond to price signals much more strongly than health signals.

HT2 Jeffrey Miron

http://jeffreymiron.blogspot.com/2009/10/calorie-postings-and-food-habits.html

The US government has relaxed its control over how the internet is run.

It has signed a four-page “affirmation of commitments” with the net regulator Icann, giving the body autonomy for the first time.

Previous agreements gave the US close oversight of Icann – drawing criticism from other countries and groups.

I’m sure we’re supposed to like that the federal government is giving up some of its control (I wonder how game theory or public choice theory explains that), but does it count if they’re just handing the reigns over more fully to a different institution?

This is just some loose speculation. I’m fairly certain that Icann has some critical function for smooth operation and, more importantly, organization, of the internet.

Jeff Harding from Daily Capitalist blog is already calling Obama’s proposal of new financial regulations (which are really more like hints of a proposal) New Deal V. 2.0 (hint – in austro-capitalist land, this is a bad thing).

I’m willing to reserve judgement to see what he wants to passed and what actually gets through Congress, but I share Harding’s general distaste for the thing. If there’s one sure way to screw up regulations, it’s to let the economists draft it and the politicians pass it.

Because I’m reading Taleb (sorry to keep bringing this up), I can’t help thinking that new regulations will not help us deal with the “black swan” that was the financial crisis. Regulation is retrospective and is not likely to help us forsee new problems.

“Following implementation of the act, the trajectory of the economy changed materially toward moderating output decline and job loss,” the president’s Council of Economic Advisers told Congress.

It looks like somebody needs a lesson in post hoc ergo propter hoc. I’m sure their statistics are all nice and tidy, though.

Robert Murphy shares this piece from Larry Kudlow:

In Hayekian and Misesean terms, bad investment and spending decisions are being remedied through the free-market corrective process. And, greased by easy money, today’s market correctives may produce a much stronger V-shaped recovery than the stock-market consensus expects.

Talk about misrepresenting a position! According to Hayek and Mises, using easy money to grease the wheels is the exact opposite of market correction. This is exactly what creates monetary inflation and unsustainable bubbles. So what looks like V-shaped recovery is actually, on the recovery end, only the illusion of recovery.This easy money gets funneled into bad investments which eventually come crashing down when the market can no longer support them.

This is like saying the Yankees are going to start scoring more points by trimming all that dead weight from behind the plate – by getting rid their pitching staff. He’s got some idea of how to win a baseball game, but only pays attention when the Yankees are at bat. In other words, he’s only understanding half of Austrian Business Cycle Theory – the part where easy money creates a boom, but doesn’t see the long term, stable strategy.  He’s analyzing a complex situation but only looking as far as his nose – while trying and failing to throw some peanuts towards the ‘free market’ crowd.

I’m going to try a recurring thing, where I link to other blog posts and make very quick comments about them. We’ll see how weekly Friday posts work for this.

1) Robert Murphy praises Paul Krugman – a huge turn of events from a man who is usually (and often correctly) hypercritical of the Nobel Laureate. I guess Austrians and Keynesians can find some common ground – namely when they’re attacking assumptions made the Chicago school.

2) Tyler Cowen tries to get Peter Boettke to admit that the financial bailouts were a good idea. Boettke predictably refuses, stating that Cowen is misstating what it means to be a libertarian. Cowen hits back with the notion that letting banks go bankrupt instead of bailing them out would still increase the size of government – because you need the court systems to deal with all the fallout. Steve Horowitz weighs in on the Austrian Economics blog, saying that Tyler is confusing increasing the scale of government (which would be necessary to deal with increased work load associated with bankruptcy from bank failure, but would not give government new powers). Horowitz points out the the bailouts increased the scope of government – creating a the feds precedence to use new powers.  I think this last view is essentially correct. I’ve stopped thinking of Cowen as a libertarian for a while now. Stay tooned, because I’m sure this debate is not over.

3) A strange case where the Dutch government has taken legal guardianship over a 13 year old girl, who is trying to become the youngest person to sail, solo, around the world. Her parents are ok with it, but the nanny state has intervened. Possible violation of freedoms or just negligent parents (or both)?

4) My father has a new education related blog, but has yet to post. He keeps trying to get me to teach him, but I everything I tell him he forgets in a couple weeks and asks me to repeat myself. I’m not holding out much hope that his blog will be very successful, but we’ll see. He has some good ideas about providing resources to fellow educators – something he knows a lot about.

But it is a good thing?  I buy that it would be good for allowing “gay marriage” (in the way that all civil union contracts would be the same for all consenting adults regardless of gender) but why should the state not incentivize the survival of family structure?  How would alimony and child support payments be enforced?  I’m no expert in contract law (or any law for that matter) but treatment of these issues seems problematic – and by that I mean overlooked.  One of the highest rates of single parenthood is in poor black communities, and that doesn’t seem to be working out too well for them (here is just one report)  Maybe we need stronger incentives to retain familial structure, rather than less.

Here’s one more statement of Rizzo’s I find misrepresents reality a bit:

For many centuries the State was not involved in restricting the nature of “marriage.” The terms of marriage were the domain of the Church.

Rizzo seems to forget or neglect the fact that, for a long time, the church was essentially the state.  And I’m not even talking about medieval europe here.  For good or ill, religious attitudes still affect policy makers decisions in the United States.

This points to a larger question (I’m not particularly interesting in debating the plausibility of a real change occurring in the public’s conception of marriage law).  Without a doubt, the role of the Church in people’s lives, from daily rituals to law and governence is waning.  Therefore, is the growth of a allegedly religious-neutral State a natural way for the morality of the majority to express itself?

If we’re replacing religious doctrine with some agreed upon, democratic form of secular humanism (influenced but not dictated by traditional religious tennants) maybe common law that  governs marriage isn’t a bad thing.  Maybe leaving marriage terms up to the individual parties would generate chaos?

On the other hand, tryanny of the majority is something we’re supposed to want to avoid, as well as the assumption that politicians know best.

Truly, this a tricky issue with many layers.  Isn’t it better to discuss them all before defaulting to the standard (though admittedly defensible) libertarian-anarchist position?

PS – Hello World!